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Free state tax downloads 1. Free state tax downloads   Deducting Business Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: What Can I Deduct?Cost of Goods Sold Capital Expenses Capital versus Deductible Expenses Personal versus Business Expenses How Much Can I Deduct?Not-for-profit limits. Free state tax downloads At-risk limits. Free state tax downloads Passive activities. Free state tax downloads Net operating loss. Free state tax downloads When Can I Deduct an Expense?Economic performance. Free state tax downloads Not-for-Profit ActivitiesGross Income Limit on Deductions What's New Optional safe harbor method to determine the business use of a home deduction. Free state tax downloads  Beginning in 2013, you can use the optional safe harbor method to determine the deduction for the business use of your home. Free state tax downloads See Optional safe harbor method under Business use of your home , later. Free state tax downloads Introduction This chapter covers the general rules for deducting business expenses. Free state tax downloads Business expenses are the costs of carrying on a trade or business, and they are usually deductible if the business is operated to make a profit. Free state tax downloads Topics - This chapter discusses: What you can deduct How much you can deduct When you can deduct Not-for-profit activities Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 538 Accounting Periods and Methods 542 Corporations 547 Casualties, Disasters, and Thefts 587 Business Use of Your Home 925 Passive Activity and At-Risk Rules 936 Home Mortgage Interest Deduction 946 How To Depreciate Property Form (and Instructions) Sch A (Form 1040) Itemized Deductions 5213 Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit See chapter 12 for information about getting publications and forms. Free state tax downloads What Can I Deduct? To be deductible, a business expense must be both ordinary and necessary. Free state tax downloads An ordinary expense is one that is common and accepted in your industry. Free state tax downloads A necessary expense is one that is helpful and appropriate for your trade or business. Free state tax downloads An expense does not have to be indispensable to be considered necessary. Free state tax downloads Even though an expense may be ordinary and necessary, you may not be allowed to deduct the expense in the year you paid or incurred it. Free state tax downloads In some cases you may not be allowed to deduct the expense at all. Free state tax downloads Therefore, it is important to distinguish usual business expenses from expenses that include the following. Free state tax downloads The expenses used to figure cost of goods sold, Capital expenses, and Personal expenses. Free state tax downloads Cost of Goods Sold If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Free state tax downloads Some of your business expenses may be included in figuring cost of goods sold. Free state tax downloads Cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. Free state tax downloads If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense. Free state tax downloads The following are types of expenses that go into figuring cost of goods sold. Free state tax downloads The cost of products or raw materials, including freight. Free state tax downloads Storage. Free state tax downloads Direct labor (including contributions to pension or annuity plans) for workers who produce the products. Free state tax downloads Factory overhead. Free state tax downloads Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Free state tax downloads Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs. Free state tax downloads This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million. Free state tax downloads For more information, see the following sources. Free state tax downloads Cost of goods sold—chapter 6 of Publication 334. Free state tax downloads Inventories—Publication 538. Free state tax downloads Uniform capitalization rules—Publication 538 and section 263A of the Internal Revenue Code and the related regulations. Free state tax downloads Capital Expenses You must capitalize, rather than deduct, some costs. Free state tax downloads These costs are a part of your investment in your business and are called “capital expenses. Free state tax downloads ” Capital expenses are considered assets in your business. Free state tax downloads In general, you capitalize three types of costs. Free state tax downloads Business start-up costs (See Tip below). Free state tax downloads Business assets. Free state tax downloads Improvements. Free state tax downloads You can elect to deduct or amortize certain business start-up costs. Free state tax downloads See chapters 7 and 8. Free state tax downloads Cost recovery. Free state tax downloads   Although you generally cannot take a current deduction for a capital expense, you may be able to recover the amount you spend through depreciation, amortization, or depletion. Free state tax downloads These recovery methods allow you to deduct part of your cost each year. Free state tax downloads In this way, you are able to recover your capital expense. Free state tax downloads See Amortization (chapter 8) and Depletion (chapter 9) in this publication. Free state tax downloads A taxpayer can elect to deduct a portion of the costs of certain depreciable property as a section 179 deduction. Free state tax downloads A greater portion of these costs can be deducted if the property is qualified disaster assistance property. Free state tax downloads See Publication 946 for details. Free state tax downloads Going Into Business The costs of getting started in business, before you actually begin business operations, are capital expenses. Free state tax downloads These costs may include expenses for advertising, travel, or wages for training employees. Free state tax downloads If you go into business. Free state tax downloads   When you go into business, treat all costs you had to get your business started as capital expenses. Free state tax downloads   Usually you recover costs for a particular asset through depreciation. Free state tax downloads Generally, you cannot recover other costs until you sell the business or otherwise go out of business. Free state tax downloads However, you can choose to amortize certain costs for setting up your business. Free state tax downloads See Starting a Business in chapter 8 for more information on business start-up costs. Free state tax downloads If your attempt to go into business is unsuccessful. Free state tax downloads   If you are an individual and your attempt to go into business is not successful, the expenses you had in trying to establish yourself in business fall into two categories. Free state tax downloads The costs you had before making a decision to acquire or begin a specific business. Free state tax downloads These costs are personal and nondeductible. Free state tax downloads They include any costs incurred during a general search for, or preliminary investigation of, a business or investment possibility. Free state tax downloads The costs you had in your attempt to acquire or begin a specific business. Free state tax downloads These costs are capital expenses and you can deduct them as a capital loss. Free state tax downloads   If you are a corporation and your attempt to go into a new trade or business is not successful, you may be able to deduct all investigatory costs as a loss. Free state tax downloads   The costs of any assets acquired during your unsuccessful attempt to go into business are a part of your basis in the assets. Free state tax downloads You cannot take a deduction for these costs. Free state tax downloads You will recover the costs of these assets when you dispose of them. Free state tax downloads Business Assets There are many different kinds of business assets; for example, land, buildings, machinery, furniture, trucks, patents, and franchise rights. Free state tax downloads You must fully capitalize the cost of these assets, including freight and installation charges. Free state tax downloads Certain property you produce for use in your trade or business must be capitalized under the uniform capitalization rules. Free state tax downloads See Regulations section 1. Free state tax downloads 263A-2 for information on these rules. Free state tax downloads Improvements Improvements are generally major expenditures. Free state tax downloads Some examples are: new electric wiring, a new roof, a new floor, new plumbing, bricking up windows to strengthen a wall, and lighting improvements. Free state tax downloads The costs of making improvements to a business asset are capital expenses if the improvements add to the value of the asset, appreciably lengthen the time you can use it, or adapt it to a different use. Free state tax downloads Beginning in 2014, you must capitalize as improvements costs that are for the betterment of a unit of property, restore the unit of property, or adapt the unit of property to a new or different use. Free state tax downloads Temporary regulations allow you to capitalize costs meeting the above criteria for tax years beginning after 2011. Free state tax downloads However, you can currently deduct repairs that keep your property in a normal efficient operating condition as a business expense. Free state tax downloads Treat as repairs amounts paid to replace parts of a machine that only keep it in a normal operating condition. Free state tax downloads Restoration plan. Free state tax downloads   Capitalize the cost of reconditioning, improving, or altering your property as part of a general restoration plan to make it suitable for your business. Free state tax downloads This applies even if some of the work would by itself be classified as repairs. Free state tax downloads Capital versus Deductible Expenses To help you distinguish between capital and deductible expenses, different examples are given below. Free state tax downloads Motor vehicles. Free state tax downloads   You usually capitalize the cost of a motor vehicle you use in your business. Free state tax downloads You can recover its cost through annual deductions for depreciation. Free state tax downloads   There are dollar limits on the depreciation you can claim each year on passenger automobiles used in your business. Free state tax downloads See Publication 463. Free state tax downloads   Generally, repairs you make to your business vehicle are currently deductible. Free state tax downloads However, amounts you pay to recondition and overhaul a business vehicle are capital expenses and are recovered through depreciation. Free state tax downloads Roads and driveways. Free state tax downloads    The cost of building a private road on your business property and the cost of replacing a gravel driveway with a concrete one are capital expenses you may be able to depreciate. Free state tax downloads The cost of maintaining a private road on your business property is a deductible expense. Free state tax downloads Tools. Free state tax downloads   Unless the uniform capitalization rules apply, amounts spent for tools used in your business are deductible expenses if the tools have a life expectancy of less than 1 year or their cost is minor. Free state tax downloads Machinery parts. Free state tax downloads   Unless the uniform capitalization rules apply, the cost of replacing short-lived parts of a machine to keep it in good working condition, but not add to its life, is a deductible expense. Free state tax downloads Heating equipment. Free state tax downloads   The cost of changing from one heating system to another is a capital expense. Free state tax downloads Personal versus Business Expenses Generally, you cannot deduct personal, living, or family expenses. Free state tax downloads However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. Free state tax downloads You can deduct the business part. Free state tax downloads For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you generally can deduct 70% of the interest as a business expense. Free state tax downloads The remaining 30% is personal interest and generally is not deductible. Free state tax downloads See chapter 4 for information on deducting interest and the allocation rules. Free state tax downloads Business use of your home. Free state tax downloads   If you use part of your home for business, you may be able to deduct expenses for the business use of your home. Free state tax downloads These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Free state tax downloads   To qualify to claim expenses for the business use of your home, you must meet both of the following tests. Free state tax downloads The business part of your home must be used exclusively and regularly for your trade or business. Free state tax downloads The business part of your home must be: Your principal place of business, or A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) used in connection with your trade or business. Free state tax downloads   You generally do not have to meet the exclusive use test for the part of your home that you regularly use either for the storage of inventory or product samples, or as a daycare facility. Free state tax downloads   Your home office qualifies as your principal place of business if you meet the following requirements. Free state tax downloads You use the office exclusively and regularly for administrative or management activities of your trade or business. Free state tax downloads You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Free state tax downloads   If you have more than one business location, determine your principal place of business based on the following factors. Free state tax downloads The relative importance of the activities performed at each location. Free state tax downloads If the relative importance factor does not determine your principal place of business, consider the time spent at each location. Free state tax downloads Optional safe harbor method. Free state tax downloads   Beginning in 2013, individual taxpayers can use the optional safe harbor method to determine the amount of deductible expenses attributable to certain business use of a residence during the tax year. Free state tax downloads This method is an alternative to the calculation, allocation, and substantiation of actual expenses. Free state tax downloads   The deduction under the optional method is limited to $1,500 per year based on $5 a square foot for up to 300 square feet. Free state tax downloads Under this method, you claim your allowable mortgage interest, real estate taxes, and casualty losses on the home as itemized deductions on Schedule A (Form 1040). Free state tax downloads You are not required to allocate these deductions between personal and business use, as is required under the regular method. Free state tax downloads If you use the optional method, you cannot depreciate the portion of your home used in a trade or business. Free state tax downloads   Business expenses unrelated to the home, such as advertising, supplies, and wages paid to employees, are still fully deductible. Free state tax downloads All of the requirements discussed earlier under Business use of your home still apply. Free state tax downloads   For more information on the deduction for business use of your home, including the optional safe harbor method, see Publication 587. Free state tax downloads    If you were entitled to deduct depreciation on the part of your home used for business, you cannot exclude the part of the gain from the sale of your home that equals any depreciation you deducted (or could have deducted) for periods after May 6, 1997. Free state tax downloads Business use of your car. Free state tax downloads   If you use your car exclusively in your business, you can deduct car expenses. Free state tax downloads If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Free state tax downloads Generally, commuting expenses between your home and your business location, within the area of your tax home, are not deductible. Free state tax downloads   You can deduct actual car expenses, which include depreciation (or lease payments), gas and oil, tires, repairs, tune-ups, insurance, and registration fees. Free state tax downloads Or, instead of figuring the business part of these actual expenses, you may be able to use the standard mileage rate to figure your deduction. Free state tax downloads Beginning in 2013, the standard mileage rate is 56. Free state tax downloads 5 cents per mile. Free state tax downloads   If you are self-employed, you can also deduct the business part of interest on your car loan, state and local personal property tax on the car, parking fees, and tolls, whether or not you claim the standard mileage rate. Free state tax downloads   For more information on car expenses and the rules for using the standard mileage rate, see Publication 463. Free state tax downloads How Much Can I Deduct? Generally, you can deduct the full amount of a business expense if it meets the criteria of ordinary and necessary and it is not a capital expense. Free state tax downloads Recovery of amount deducted (tax benefit rule). Free state tax downloads   If you recover part of an expense in the same tax year in which you would have claimed a deduction, reduce your current year expense by the amount of the recovery. Free state tax downloads If you have a recovery in a later year, include the recovered amount in income in that year. Free state tax downloads However, if part of the deduction for the expense did not reduce your tax, you do not have to include that part of the recovered amount in income. Free state tax downloads   For more information on recoveries and the tax benefit rule, see Publication 525. Free state tax downloads Payments in kind. Free state tax downloads   If you provide services to pay a business expense, the amount you can deduct is limited to your out-of-pocket costs. Free state tax downloads You cannot deduct the cost of your own labor. Free state tax downloads   Similarly, if you pay a business expense in goods or other property, you can deduct only what the property costs you. Free state tax downloads If these costs are included in the cost of goods sold, do not deduct them again as a business expense. Free state tax downloads Limits on losses. Free state tax downloads   If your deductions for an investment or business activity are more than the income it brings in, you have a loss. Free state tax downloads There may be limits on how much of the loss you can deduct. Free state tax downloads Not-for-profit limits. Free state tax downloads   If you carry on your business activity without the intention of making a profit, you cannot use a loss from it to offset other income. Free state tax downloads See Not-for-Profit Activities , later. Free state tax downloads At-risk limits. Free state tax downloads   Generally, a deductible loss from a trade or business or other income-producing activity is limited to the investment you have “at risk” in the activity. Free state tax downloads You are at risk in any activity for the following. Free state tax downloads The money and adjusted basis of property you contribute to the activity. Free state tax downloads Amounts you borrow for use in the activity if: You are personally liable for repayment, or You pledge property (other than property used in the activity) as security for the loan. Free state tax downloads For more information, see Publication 925. Free state tax downloads Passive activities. Free state tax downloads   Generally, you are in a passive activity if you have a trade or business activity in which you do not materially participate, or a rental activity. Free state tax downloads In general, deductions for losses from passive activities only offset income from passive activities. Free state tax downloads You cannot use any excess deductions to offset other income. Free state tax downloads In addition, passive activity credits can only offset the tax on net passive income. Free state tax downloads Any excess loss or credits are carried over to later years. Free state tax downloads Suspended passive losses are fully deductible in the year you completely dispose of the activity. Free state tax downloads For more information, see Publication 925. Free state tax downloads Net operating loss. Free state tax downloads   If your deductions are more than your income for the year, you may have a “net operating loss. Free state tax downloads ” You can use a net operating loss to lower your taxes in other years. Free state tax downloads See Publication 536 for more information. Free state tax downloads   See Publication 542 for information about net operating losses of corporations. Free state tax downloads When Can I Deduct an Expense? When you can deduct an expense depends on your accounting method. Free state tax downloads An accounting method is a set of rules used to determine when and how income and expenses are reported. Free state tax downloads The two basic methods are the cash method and the accrual method. Free state tax downloads Whichever method you choose must clearly reflect income. Free state tax downloads For more information on accounting methods, see Publication 538. Free state tax downloads Cash method. Free state tax downloads   Under the cash method of accounting, you generally deduct business expenses in the tax year you pay them. Free state tax downloads Accrual method. Free state tax downloads   Under an accrual method of accounting, you generally deduct business expenses when both of the following apply. Free state tax downloads The all-events test has been met. Free state tax downloads The test is met when: All events have occurred that fix the fact of liability, and The liability can be determined with reasonable accuracy. Free state tax downloads Economic performance has occurred. Free state tax downloads Economic performance. Free state tax downloads   You generally cannot deduct or capitalize a business expense until economic performance occurs. Free state tax downloads If your expense is for property or services provided to you, or for your use of property, economic performance occurs as the property or services are provided, or the property is used. Free state tax downloads If your expense is for property or services you provide to others, economic performance occurs as you provide the property or services. Free state tax downloads Example. Free state tax downloads Your tax year is the calendar year. Free state tax downloads In December 2013, the Field Plumbing Company did some repair work at your place of business and sent you a bill for $600. Free state tax downloads You paid it by check in January 2014. Free state tax downloads If you use the accrual method of accounting, deduct the $600 on your tax return for 2013 because all events have occurred to “fix” the fact of liability (in this case the work was completed), the liability can be determined, and economic performance occurred in that year. Free state tax downloads If you use the cash method of accounting, deduct the expense on your 2014 return. Free state tax downloads Prepayment. Free state tax downloads   You generally cannot deduct expenses in advance, even if you pay them in advance. Free state tax downloads This rule applies to both the cash and accrual methods. Free state tax downloads It applies to prepaid interest, prepaid insurance premiums, and any other expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. Free state tax downloads Example. Free state tax downloads In 2013, you sign a 10-year lease and immediately pay your rent for the first 3 years. Free state tax downloads Even though you paid the rent for 2013, 2014, and 2015, you can only deduct the rent for 2013 on your 2013 tax return. Free state tax downloads You can deduct the rent for 2014 and 2015 on your tax returns for those years. Free state tax downloads Contested liability. Free state tax downloads   Under the cash method, you can deduct a contested liability only in the year you pay the liability. Free state tax downloads Under the accrual method, you can deduct contested liabilities such as taxes (except foreign or U. Free state tax downloads S. Free state tax downloads possession income, war profits, and excess profits taxes) either in the tax year you pay the liability (or transfer money or other property to satisfy the obligation) or in the tax year you settle the contest. Free state tax downloads However, to take the deduction in the year of payment or transfer, you must meet certain conditions. Free state tax downloads See Regulations section 1. Free state tax downloads 461-2. Free state tax downloads Related person. Free state tax downloads   Under an accrual method of accounting, you generally deduct expenses when you incur them, even if you have not yet paid them. Free state tax downloads However, if you and the person you owe are related and that person uses the cash method of accounting, you must pay the expense before you can deduct it. Free state tax downloads Your deduction is allowed when the amount is includible in income by the related cash method payee. Free state tax downloads See Related Persons in Publication 538. Free state tax downloads Not-for-Profit Activities If you do not carry on your business or investment activity to make a profit, you cannot use a loss from the activity to offset other income. Free state tax downloads Activities you do as a hobby, or mainly for sport or recreation, are often not entered into for profit. Free state tax downloads The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. Free state tax downloads It does not apply to corporations other than S corporations. Free state tax downloads In determining whether you are carrying on an activity for profit, several factors are taken into account. Free state tax downloads No one factor alone is decisive. Free state tax downloads Among the factors to consider are whether: You carry on the activity in a businesslike manner, The time and effort you put into the activity indicate you intend to make it profitable, You depend on the income for your livelihood, Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business), You change your methods of operation in an attempt to improve profitability, You (or your advisors) have the knowledge needed to carry on the activity as a successful business, You were successful in making a profit in similar activities in the past, The activity makes a profit in some years, and You can expect to make a future profit from the appreciation of the assets used in the activity. Free state tax downloads Presumption of profit. Free state tax downloads   An activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year. Free state tax downloads Activities that consist primarily of breeding, training, showing, or racing horses are presumed carried on for profit if they produced a profit in at least 2 of the last 7 tax years, including the current year. Free state tax downloads The activity must be substantially the same for each year within this period. Free state tax downloads You have a profit when the gross income from an activity exceeds the deductions. Free state tax downloads   If a taxpayer dies before the end of the 5-year (or 7-year) period, the “test” period ends on the date of the taxpayer's death. Free state tax downloads   If your business or investment activity passes this 3- (or 2-) years-of-profit test, the IRS will presume it is carried on for profit. Free state tax downloads This means the limits discussed here will not apply. Free state tax downloads You can take all your business deductions from the activity, even for the years that you have a loss. Free state tax downloads You can rely on this presumption unless the IRS later shows it to be invalid. Free state tax downloads Using the presumption later. Free state tax downloads   If you are starting an activity and do not have 3 (or 2) years showing a profit, you can elect to have the presumption made after you have the 5 (or 7) years of experience allowed by the test. Free state tax downloads   You can elect to do this by filing Form 5213. Free state tax downloads Filing this form postpones any determination that your activity is not carried on for profit until 5 (or 7) years have passed since you started the activity. Free state tax downloads   The benefit gained by making this election is that the IRS will not immediately question whether your activity is engaged in for profit. Free state tax downloads Accordingly, it will not restrict your deductions. Free state tax downloads Rather, you will gain time to earn a profit in the required number of years. Free state tax downloads If you show 3 (or 2) years of profit at the end of this period, your deductions are not limited under these rules. Free state tax downloads If you do not have 3 (or 2) years of profit, the limit can be applied retroactively to any year with a loss in the 5-year (or 7-year) period. Free state tax downloads   Filing Form 5213 automatically extends the period of limitations on any year in the 5-year (or 7-year) period to 2 years after the due date of the return for the last year of the period. Free state tax downloads The period is extended only for deductions of the activity and any related deductions that might be affected. Free state tax downloads    You must file Form 5213 within 3 years after the due date of your return (determined without extensions) for the year in which you first carried on the activity, or, if earlier, within 60 days after receiving written notice from the Internal Revenue Service proposing to disallow deductions attributable to the activity. Free state tax downloads Gross Income Gross income from a not-for-profit activity includes the total of all gains from the sale, exchange, or other disposition of property, and all other gross receipts derived from the activity. Free state tax downloads Gross income from the activity also includes capital gains and rents received for the use of property which is held in connection with the activity. Free state tax downloads You can determine gross income from any not-for-profit activity by subtracting the cost of goods sold from your gross receipts. Free state tax downloads However, if you determine gross income by subtracting cost of goods sold from gross receipts, you must do so consistently, and in a manner that follows generally accepted methods of accounting. Free state tax downloads Limit on Deductions If your activity is not carried on for profit, take deductions in the following order and only to the extent stated in the three categories. Free state tax downloads If you are an individual, these deductions may be taken only if you itemize. Free state tax downloads These deductions may be taken on Schedule A (Form 1040). Free state tax downloads Category 1. Free state tax downloads   Deductions you can take for personal as well as for business activities are allowed in full. Free state tax downloads For individuals, all nonbusiness deductions, such as those for home mortgage interest, taxes, and casualty losses, belong in this category. Free state tax downloads Deduct them on the appropriate lines of Schedule A (Form 1040). Free state tax downloads For tax years beginning after December 31, 2008, you can deduct a casualty loss on property you own for personal use only to the extent it is more than $500 and exceeds 10% of your adjusted gross income (AGI). Free state tax downloads The 10% AGI limitation does not apply to net disaster losses resulting from federally declared disasters in 2008 and 2009, and individuals are allowed to claim the net disaster losses even if they do not itemize their deductions. Free state tax downloads The reduction amount returns to $100 for tax years beginning after December 31, 2009. Free state tax downloads See Publication 547 for more information on casualty losses. Free state tax downloads For the limits that apply to home mortgage interest, see Publication 936. Free state tax downloads Category 2. Free state tax downloads   Deductions that do not result in an adjustment to the basis of property are allowed next, but only to the extent your gross income from the activity is more than your deductions under the first category. Free state tax downloads Most business deductions, such as those for advertising, insurance premiums, interest, utilities, and wages, belong in this category. Free state tax downloads Category 3. Free state tax downloads   Business deductions that decrease the basis of property are allowed last, but only to the extent the gross income from the activity exceeds the deductions you take under the first two categories. Free state tax downloads Deductions for depreciation, amortization, and the part of a casualty loss an individual could not deduct in category (1) belong in this category. Free state tax downloads Where more than one asset is involved, allocate depreciation and these other deductions proportionally. Free state tax downloads    Individuals must claim the amounts in categories (2) and (3) as miscellaneous deductions on Schedule A (Form 1040). Free state tax downloads They are subject to the 2%-of-adjusted-gross-income limit. Free state tax downloads See Publication 529 for information on this limit. Free state tax downloads Example. Free state tax downloads Adriana is engaged in a not-for-profit activity. Free state tax downloads The income and expenses of the activity are as follows. Free state tax downloads Gross income $3,200 Subtract:     Real estate taxes $700   Home mortgage interest 900   Insurance 400   Utilities 700   Maintenance 200   Depreciation on an automobile 600   Depreciation on a machine 200 3,700 Loss $(500)   Adriana must limit her deductions to $3,200, the gross income she earned from the activity. Free state tax downloads The limit is reached in category (3), as follows. Free state tax downloads Limit on deduction $3,200 Category 1: Taxes and interest $1,600   Category 2: Insurance, utilities, and maintenance 1,300 2,900 Available for Category 3 $ 300   The $800 of depreciation is allocated between the automobile and machine as follows. Free state tax downloads $600 $800 x $300 = $225 depreciation for the automobile             $200 $800 x $300 = $75 depreciation for the machine The basis of each asset is reduced accordingly. Free state tax downloads Adriana includes the $3,200 of gross income on line 21 (other income) of Form 1040. Free state tax downloads The $1,600 for category (1) is deductible in full on the appropriate lines for taxes and interest on Schedule A (Form 1040). Free state tax downloads Adriana deducts the remaining $1,600 ($1,300 for category (2) and $300 for category (3)) as other miscellaneous deductions on Schedule A (Form 1040) subject to the 2%-of-adjusted-gross-income limit. Free state tax downloads Partnerships and S corporations. Free state tax downloads   If a partnership or S corporation carries on a not-for-profit activity, these limits apply at the partnership or S corporation level. Free state tax downloads They are reflected in the individual shareholder's or partner's distributive shares. Free state tax downloads More than one activity. Free state tax downloads   If you have several undertakings, each may be a separate activity or several undertakings may be combined. Free state tax downloads The following are the most significant facts and circumstances in making this determination. Free state tax downloads The degree of organizational and economic interrelationship of various undertakings. Free state tax downloads The business purpose that is (or might be) served by carrying on the various undertakings separately or together in a business or investment setting. Free state tax downloads The similarity of the undertakings. Free state tax downloads   The IRS will generally accept your characterization if it is supported by facts and circumstances. Free state tax downloads    If you are carrying on two or more different activities, keep the deductions and income from each one separate. Free state tax downloads Figure separately whether each is a not-for-profit activity. Free state tax downloads Then figure the limit on deductions and losses separately for each activity that is not for profit. Free state tax downloads Prev  Up  Next   Home   More Online Publications
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

South Dakota Office of the Attorney General

Website: South Dakota Office of the Attorney General

Address: South Dakota Office of the Attorney General
Consumer Protection
1302 E. Hwy. 14, Suite 3
Pierre, SD 57501-8503

Phone Number: 605-773-4400

Toll-free: 1-800-300-1986 (SD)

TTY: 605-773-6585

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Labor and Regulation

Website: Department of Labor and Regulation

Address: Department of Labor and Regulation
Division of Banking
217 1/2 W. Missouri Ave.
Pierre, SD 57501

Phone Number: 605-773-3421

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Labor and Regulation

Website: Department of Labor and Regulation

Address: Department of Labor and Regulation
Division of Insurance
445 E. Capitol Ave.
Pierre, SD 57501

Phone Number: 605-773-3563

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Department of Labor and Regulation

Website: Department of Labor and Regulation

Address: Department of Labor and Regulation
Division of Securities
445 E. Capitol Ave.
Pierre, SD 57501-3185

Phone Number: 605-773-4823

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Public Utilities Commission

Website: Public Utilities Commission

Address: Public Utilities Commission
Consumer Affairs
500 E. Capitol Ave.
Pierre, SD 57501-5070

Phone Number: 605-773-3201

Toll-free: 1-800-332-1782

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The Free State Tax Downloads

Free state tax downloads Publication 521 - Main Content Table of Contents Who Can Deduct Moving ExpensesMove Related to Start of Work Distance Test Time Test Retirees or Survivors Who Move to the United States Deductible Moving ExpensesMoves to Locations in the United States Moves to Locations Outside the United States Nondeductible Expenses ReimbursementsTypes of Reimbursement Plans Tax Withholding and Estimated Tax How and When To ReportForm 3903 When To Deduct Expenses Illustrated Example Members of the Armed Forces How To Get Tax Help Who Can Deduct Moving Expenses You can deduct your moving expenses if you meet all three of the following requirements. Free state tax downloads Your move is closely related to the start of work. Free state tax downloads You meet the distance test. Free state tax downloads You meet the time test. Free state tax downloads After you have read these rules, you may want to use Figure B to help you decide if you can deduct your moving expenses. Free state tax downloads Retirees, survivors, and Armed Forces members. Free state tax downloads   Different rules may apply if you are a member of the Armed Forces or a retiree or survivor moving to the United States. Free state tax downloads These rules are discussed later in this publication. Free state tax downloads Move Related to Start of Work Your move must be closely related, both in time and in place, to the start of work at your new job location. Free state tax downloads Closely related in time. Free state tax downloads   In most cases, you can consider moving expenses incurred within 1 year from the date you first reported to work at the new location as closely related in time to the start of work. Free state tax downloads It is not necessary that you arrange to work before moving to a new location, as long as you actually go to work in that location. Free state tax downloads    Figure A. Free state tax downloads Illustration of Distance Test Please click here for the text description of the image. Free state tax downloads Figure A   If you do not move within 1 year of the date you begin work, you ordinarily cannot deduct the expenses unless you can show that circumstances existed that prevented the move within that time. Free state tax downloads Example. Free state tax downloads Your family moved more than a year after you started work at a new location. Free state tax downloads You delayed the move for 18 months to allow your child to complete high school. Free state tax downloads You can deduct your moving expenses. Free state tax downloads Closely related in place. Free state tax downloads   You can generally consider your move closely related in place to the start of work if the distance from your new home to the new job location is not more than the distance from your former home to the new job location. Free state tax downloads If your move does not meet this requirement, you may still be able to deduct moving expenses if you can show that: You are required to live at your new home as a condition of your employment, or You will spend less time or money commuting from your new home to your new job location. Free state tax downloads Home defined. Free state tax downloads   Your home means your main home (residence). Free state tax downloads It can be a house, apartment, condominium, houseboat, house trailer, or similar dwelling. Free state tax downloads It does not include other homes owned or kept up by you or members of your family. Free state tax downloads It also does not include a seasonal home, such as a summer beach cottage. Free state tax downloads Your former home means your home before you left for your new job location. Free state tax downloads Your new home means your home within the area of your new job location. Free state tax downloads Retirees or survivors. Free state tax downloads   You may be able to deduct the expenses of moving to the United States or its possessions even though the move is not related to the start of work at a new job location. Free state tax downloads You must have worked outside the United States or be a survivor of someone who did. Free state tax downloads See Retirees or Survivors Who Move to the United States, later. Free state tax downloads Distance Test Your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home. Free state tax downloads For example, if your old main job location was 3 miles from your former home, your new main job location must be at least 53 miles from that former home. Free state tax downloads You can use Worksheet 1 to see if you meet this test. Free state tax downloads Worksheet 1. Free state tax downloads Distance Test   Note. Free state tax downloads Members of the Armed Forces may not have to meet this test. Free state tax downloads See Members of the Armed Forces. Free state tax downloads     1. Free state tax downloads Enter the number of miles from your old home to your new workplace 1. Free state tax downloads miles 2. Free state tax downloads Enter the number of miles from your old home to your old workplace 2. Free state tax downloads miles 3. Free state tax downloads Subtract line 2 from line 1. Free state tax downloads If zero or less, enter -0- 3. Free state tax downloads miles 4. Free state tax downloads Is line 3 at least 50 miles? □ Yes. Free state tax downloads You meet this test. Free state tax downloads  □ No. Free state tax downloads You do not meet this test. Free state tax downloads You cannot deduct your moving expenses. Free state tax downloads The distance between a job location and your home is the shortest of the more commonly traveled routes between them. Free state tax downloads The distance test considers only the location of your former home. Free state tax downloads It does not take into account the location of your new home. Free state tax downloads See Figure A, earlier. Free state tax downloads Example. Free state tax downloads You moved to a new home less than 50 miles from your former home because you changed main job locations. Free state tax downloads Your old main job location was 3 miles from your former home. Free state tax downloads Your new main job location is 60 miles from that home. Free state tax downloads Because your new main job location is 57 miles farther from your former home than the distance from your former home to your old main job location, you meet the distance test. Free state tax downloads First job or return to full-time work. Free state tax downloads   If you go to work full time for the first time, your place of work must be at least 50 miles from your former home to meet the distance test. Free state tax downloads   If you go back to full-time work after a substantial period of part-time work or unemployment, your place of work also must be at least 50 miles from your former home. Free state tax downloads Armed Forces. Free state tax downloads   If you are in the Armed Forces and you moved because of a permanent change of station, you do not have to meet the distance test. Free state tax downloads See Members of the Armed Forces, later. Free state tax downloads Main job location. Free state tax downloads   Your main job location is usually the place where you spend most of your working time. Free state tax downloads This could be your office, plant, store, shop, or other location. Free state tax downloads If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to “base” your work. Free state tax downloads Union members. Free state tax downloads   If you work for several employers on a short-term basis and you get work under a union hall system (such as a construction or building trades worker), your main job location is the union hall. Free state tax downloads More than one job. Free state tax downloads   If you have more than one job at any time, your main job location depends on the facts in each case. Free state tax downloads The more important factors to be considered are: The total time you spend at each place, The amount of work you do at each place, and How much money you earn at each place. Free state tax downloads    Table 1. Free state tax downloads Satisfying the Time Test for Employees and Self-Employed Persons IF you are. Free state tax downloads . Free state tax downloads . Free state tax downloads THEN you satisfy the time test by meeting the. Free state tax downloads . Free state tax downloads . Free state tax downloads an employee 39-week test for employees. Free state tax downloads self-employed 78-week test for self-employed persons. Free state tax downloads both self-employed and an employee at the same time 78-week test for a self-employed person or the 39-week  test for an employee. Free state tax downloads Your principal place of work  determines which test applies. Free state tax downloads both self-employed and an employee, but unable to satisfy the 39-week test for employees 78-week test for self-employed persons. Free state tax downloads Time Test To deduct your moving expenses, you also must meet one of the following two time tests. Free state tax downloads The time test for employees. Free state tax downloads The time test for self-employed persons. Free state tax downloads Both of these tests are explained below. Free state tax downloads See Table 1, below, for a summary of these tests. Free state tax downloads You can deduct your moving expenses before you meet either of the time tests. Free state tax downloads See Time Test Not Yet Met, later. Free state tax downloads Time Test for Employees If you are an employee, you must work full time for at least 39 weeks during the first 12 months after you arrive in the general area of your new job location (39-week test). Free state tax downloads Full-time employment depends on what is usual for your type of work in your area. Free state tax downloads For purposes of this test, the following four rules apply. Free state tax downloads You count only your full-time work as an employee, not any work you do as a self-employed person. Free state tax downloads You do not have to work for the same employer for all 39 weeks. Free state tax downloads You do not have to work 39 weeks in a row. Free state tax downloads You must work full time within the same general commuting area for all 39 weeks. Free state tax downloads Temporary absence from work. Free state tax downloads   You are considered to have worked full time during any week you are temporarily absent from work because of illness, strikes, lockouts, layoffs, natural disasters, or similar causes. Free state tax downloads You are also considered to have worked full time during any week you are absent from work for leave or vacation provided for in your work contract or agreement. Free state tax downloads Seasonal work. Free state tax downloads   If your work is seasonal, you are considered to be working full time during the off-season only if your work contract or agreement covers an off-season period of less than 6 months. Free state tax downloads For example, a school teacher on a 12-month contract who teaches on a full-time basis for more than 6 months is considered to have worked full time for the entire 12 months. Free state tax downloads    Figure B. Free state tax downloads Can You Deduct Expenses for a Non-Military Move Within the United States? Please click here for the text description of the image. Free state tax downloads Figure B Time Test for Self-Employed Persons If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you arrive in the general area of your new job location (78-week test). Free state tax downloads For purposes of the time test for self-employed persons, the following three rules apply. Free state tax downloads You count any full-time work you do either as an employee or as a self-employed person. Free state tax downloads You do not have to work for the same employer or be self-employed in the same trade or business for the 78 weeks. Free state tax downloads You must work within the same general commuting area for all 78 weeks. Free state tax downloads Example. Free state tax downloads You are a self-employed accountant who moves from Atlanta to New York City, and begin to work there on December 1, 2013. Free state tax downloads You pay moving expenses in 2013 and 2014 in connection with this move. Free state tax downloads On April 15, 2014, when you file your income tax return for the year 2013, you have been performing services as a self-employed individual on a full-time basis in New York City for approximately 20 weeks. Free state tax downloads Although you have not satisfied the 78-week employment condition at this time, you can deduct your 2013 moving expenses on your 2013 income tax return as there is still sufficient time remaining before December 1, 2015, to satisfy such condition. Free state tax downloads You can deduct any moving expenses you pay in 2014 on your 2014 income tax return even if you have not met the 78-week test. Free state tax downloads You have until December 1, 2015, to satisfy this requirement. Free state tax downloads Self-employment. Free state tax downloads   You are self-employed if you work as the sole owner of an unincorporated business or as a partner in a partnership carrying on a business. Free state tax downloads You are not considered self-employed if you are semi-retired, are a part-time student, or work only a few hours each week. Free state tax downloads Full-time work. Free state tax downloads   You can count only those weeks during which you work full time as a week of work. Free state tax downloads Whether you work full time during any week depends on what is usual for your type of work in your area. Free state tax downloads For example, you are a self-employed dentist and maintain office hours 4 days a week. Free state tax downloads You are considered to perform services full time if maintaining office hours 4 days a week is not unusual for other self-employed dentists in your area. Free state tax downloads Temporary absence from work. Free state tax downloads   You are considered to be self-employed on a full-time basis during any week you are temporarily absent from work because of illness, strikes, natural disasters, or similar causes. Free state tax downloads Seasonal trade or business. Free state tax downloads   If your trade or business is seasonal, the off-season weeks when no work is required or available may be counted as weeks during which you worked full time. Free state tax downloads The off-season must be less than 6 months and you must work full time before and after the off-season. Free state tax downloads Example. Free state tax downloads You own and operate a motel at a beach resort. Free state tax downloads The motel is closed for 5 months during the off-season. Free state tax downloads You work full time as the operator of the motel before and after the off-season. Free state tax downloads You are considered self-employed on a full-time basis during the weeks of the off-season. Free state tax downloads   If you were both an employee and self-employed, see Table 1 earlier, for the requirements. Free state tax downloads Example. Free state tax downloads Justin quit his job and moved from the east coast to the west coast to begin a full-time job as a cabinet-maker for C and L Cabinet Shop. Free state tax downloads He generally worked at the shop about 40 hours each week. Free state tax downloads Shortly after the move, Justin also began operating a cabinet-installation business from his home for several hours each afternoon and all day on weekends. Free state tax downloads Because Justin's principal place of business is the cabinet shop, he can satisfy the time test by meeting the 39-week test. Free state tax downloads    If Justin is unable to satisfy the requirements of the 39-week test during the 12-month period immediately following his arrival in the general location of his new principal place of work, he can satisfy the 78-week test. Free state tax downloads Joint Return If you are married, file a joint return, and both you and your spouse work full-time, either of you can satisfy the full-time work test. Free state tax downloads However, you cannot add the weeks your spouse worked to the weeks you worked to satisfy that test. Free state tax downloads Time Test Not Yet Met You can deduct your moving expenses on your 2013 tax return even though you have not met the time test by the date your 2013 return is due. Free state tax downloads You can do this if you expect to meet the 39-week test in 2014 or the 78-week test in 2014 or 2015. Free state tax downloads If you do not deduct your moving expenses on your 2013 return, and you later meet the time test, you can file an amended return for 2013 to take the deduction. Free state tax downloads See When To Deduct Expenses later, for more details. Free state tax downloads Failure to meet the time test. Free state tax downloads    If you deduct moving expenses but do not meet the time test in 2014 or 2015, you must either: Report your moving expense deduction as other income on your Form 1040 for the year you cannot meet the test, or Use Form 1040X to amend your 2013 return, figuring your tax without the moving expense deduction. Free state tax downloads Example. Free state tax downloads You arrive in the general area of your new job location, as an employee, on September 15, 2013. Free state tax downloads You deduct your moving expenses on your 2013 return, the year of the move, even though you have not yet met the time test by the date your return is due. Free state tax downloads If you do not meet the 39-week test during the 12-month period following your arrival in the general area of your new job location, you must either: Report your moving expense deduction as other income on your Form 1040 for 2014, or Use Form 1040X to amend your 2013 return, figuring your tax without the moving expense deduction. Free state tax downloads Exceptions to the Time Test You do not have to meet the time test if one of the following applies. Free state tax downloads You are in the Armed Forces and you moved because of a permanent change of station. Free state tax downloads See Members of the Armed Forces , later. Free state tax downloads Your main job location was outside the United States and you moved to the United States because you retired. Free state tax downloads See Retirees or Survivors Who Move to the United States, later. Free state tax downloads You are the survivor of a person whose main job location at the time of death was outside the United States. Free state tax downloads See Retirees or Survivors Who Move to the United States, later. Free state tax downloads Your job at the new location ends because of death or disability. Free state tax downloads You are transferred for your employer's benefit or laid off for a reason other than willful misconduct. Free state tax downloads For this exception, you must have obtained full-time employment and you must have expected to meet the test at the time you started the job. Free state tax downloads Retirees or Survivors Who Move to the United States If you are a retiree who was working abroad or a survivor of a decedent who was working abroad and you move to the United States or one of its possessions, you do not have to meet the time test, discussed earlier. Free state tax downloads However, you must meet the requirements discussed below under Retirees who were working abroad or Survivors of decedents who were working abroad. Free state tax downloads If you are living in the United States, retire, and then move and remain retired, you cannot claim a moving expense deduction for that move. Free state tax downloads United States defined. Free state tax downloads   For this section of this publication, the term “United States” includes the possessions of the United States. Free state tax downloads Retirees who were working abroad. Free state tax downloads   You can deduct moving expenses for a move to a new home in the United States when you permanently retire. Free state tax downloads However, both your former main job location and your former home must have been outside the United States. Free state tax downloads Permanently retired. Free state tax downloads   You are considered permanently retired when you cease gainful full-time employment or self-employment. Free state tax downloads If, at the time you retire, you intend your retirement to be permanent, you will be considered retired even though you later return to work. Free state tax downloads Your intention to retire permanently may be determined by: Your age and health, The customary retirement age for people who do similar work, Whether you receive retirement payments from a pension or retirement fund, and The length of time before you return to full-time work. Free state tax downloads Decedents. Free state tax downloads   Qualified deductible moving expenses are allowed on a final return (Form 1040 or 1040NR) when a taxpayer has moved and dies within the same calendar year. Free state tax downloads The personal representative filing on behalf of that taxpayer should complete and attach Form 3903 to the final return. Free state tax downloads   A personal representative can be an executor, administrator, or anyone who is in charge of the deceased person's property. Free state tax downloads For more information, see Publication 559, Survivors, Executors, and Administrators. Free state tax downloads Survivors of decedents who were working abroad. Free state tax downloads   If you are the spouse or the dependent of a person whose main job location at the time of death was outside the United States, you can deduct moving expenses if the following five requirements are met. Free state tax downloads The move is to a home in the United States. Free state tax downloads The move begins within 6 months after the decedent's death. Free state tax downloads (When a move begins is described below. Free state tax downloads ) The move is from the decedent's former home. Free state tax downloads The decedent's former home was outside the United States. Free state tax downloads The decedent's former home was also your home. Free state tax downloads When a move begins. Free state tax downloads   A move begins when one of the following events occurs. Free state tax downloads You contract for your household goods and personal effects to be moved to your home in the United States, but only if the move is completed within a reasonable time. Free state tax downloads Your household goods and personal effects are packed and on the way to your home in the United States. Free state tax downloads You leave your former home to travel to your new home in the United States. Free state tax downloads Deductible Moving Expenses If you meet the requirements discussed earlier under Who Can Deduct Moving Expenses, you can deduct the reasonable expenses of: Moving your household goods and personal effects (including in-transit or foreign-move storage expenses), and Traveling (including lodging but not meals) to your new home. Free state tax downloads You cannot deduct any expenses for meals. Free state tax downloads Reasonable expenses. Free state tax downloads   You can deduct only those expenses that are reasonable for the circumstances of your move. Free state tax downloads For example, the cost of traveling from your former home to your new one should be by the shortest, most direct route available by conventional transportation. Free state tax downloads If during your trip to your new home, you stop over, or make side trips for sightseeing, the additional expenses for your stopover or side trips are not deductible as moving expenses. Free state tax downloads Example. Free state tax downloads Beth's employer transferred her from Boston, Massachusetts, to Buffalo, New York. Free state tax downloads On her way to Buffalo, Beth drove into Canada to visit the Toronto Zoo. Free state tax downloads Since Beth's excursion into Canada was away from the usual Boston-Buffalo route, the expenses paid or incurred for the excursion are not deductible. Free state tax downloads Beth can only deduct what it would have cost to drive directly from Boston to Buffalo. Free state tax downloads Likewise, Beth cannot deduct any expenses, such as the cost of a hotel room, caused by the delay for sightseeing. Free state tax downloads Travel by car. Free state tax downloads   If you use your car to take yourself, members of your household, or your personal effects to your new home, you can figure your expenses by deducting either: Your actual expenses, such as the amount you pay for gas and oil for your car, if you keep an accurate record of each expense, or The standard mileage rate of 24 cents per mile. Free state tax downloads Whether you use actual expenses or the standard mileage rate to figure your expenses, you can deduct the parking fees and tolls you pay to move. Free state tax downloads You cannot deduct any part of general repairs, general maintenance, insurance, or depreciation for your car. Free state tax downloads Member of your household. Free state tax downloads   You can deduct moving expenses you pay for yourself and members of your household. Free state tax downloads A member of your household is anyone who has both your former and new home as his or her home. Free state tax downloads It does not include a tenant or employee, unless that person is your dependent. Free state tax downloads Moves to Locations in the United States If you meet the requirements under Who Can Deduct Moving Expenses, earlier, you can deduct expenses for a move to the area of a new main job location within the United States or its possessions. Free state tax downloads Your move may be from one U. Free state tax downloads S. Free state tax downloads location to another or from a foreign country to the United States. Free state tax downloads Household goods and personal effects. Free state tax downloads   You can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home. Free state tax downloads For purposes of moving expenses, the term “personal effects” includes, but is not limited to, movable personal property that the taxpayer owns and frequently uses. Free state tax downloads   If you use your own car to move your things, see Travel by car, earlier. Free state tax downloads   You can deduct any costs of connecting or disconnecting utilities required because you are moving your household goods, appliances, or personal effects. Free state tax downloads   You can deduct the cost of shipping your car and your household pets to your new home. Free state tax downloads   You can deduct the cost of moving your household goods and personal effects from a place other than your former home. Free state tax downloads Your deduction is limited to the amount it would have cost to move them from your former home. Free state tax downloads Example. Free state tax downloads Paul Brown has been living and working in North Carolina for the last 4 years. Free state tax downloads Because he has been renting a small apartment, he stored some furniture at his parents' home in Georgia. Free state tax downloads Paul got a job in Washington, DC. Free state tax downloads It cost him $900 to move the furniture from his North Carolina apartment to Washington and $3,000 to move the stored furniture from Georgia to Washington. Free state tax downloads It would have cost $1,800 to ship the stored furniture from North Carolina to Washington. Free state tax downloads He can deduct only $1,800 of the $3,000 he paid. Free state tax downloads The amount he can deduct for moving his furniture is $2,700 ($900 + $1,800). Free state tax downloads You cannot deduct the cost of moving furniture you buy on the way to your new home. Free state tax downloads   Storage expenses. Free state tax downloads   You can include the cost of storing and insuring household goods and personal effects within any period of 30 consecutive days after the day your things are moved from your former home and before they are delivered to your new home. Free state tax downloads Travel expenses. Free state tax downloads   You can deduct the cost of transportation and lodging for yourself and members of your household while traveling from your former home to your new home. Free state tax downloads This includes expenses for the day you arrive. Free state tax downloads    The day of arrival is the day you secure lodging at the new place of residence, even if the lodging is on a temporary basis. Free state tax downloads   You can include any lodging expenses you had in the area of your former home within one day after you could no longer live in your former home because your furniture had been moved. Free state tax downloads   The members of your household do not have to travel together or at the same time. Free state tax downloads However, you can only deduct expenses for one trip per person. Free state tax downloads If you use your own car, see Travel by car, earlier. Free state tax downloads Example. Free state tax downloads   In February 2013, Josh and Robyn Black moved from Minneapolis to Washington, DC, where Josh was starting a new job. Free state tax downloads Josh drove the family car to Washington, DC, a trip of 1,100 miles. Free state tax downloads His expenses were $264. Free state tax downloads 00 for mileage (1,100 miles x 24 cents per mile) plus $40 for tolls and $150 for lodging, for a total of $454. Free state tax downloads 00. Free state tax downloads One week later, Robyn flew from Minneapolis to Washington, DC. Free state tax downloads Her only expense was her $400 plane ticket. Free state tax downloads The Blacks' deduction is $854. Free state tax downloads 00 (Josh's $454. Free state tax downloads 00 + Robyn's $400). Free state tax downloads Moves to Locations Outside the United States To deduct expenses for a move outside the United States, you must move to the area of a new place of work outside the United States and its possessions. Free state tax downloads You must meet the requirements under Who Can Deduct Moving Expenses , earlier. Free state tax downloads Deductible expenses. Free state tax downloads   If your move is to a location outside the United States and its possessions, you can deduct the following expenses. Free state tax downloads The cost of moving household goods and personal effects from your former home to your new home. Free state tax downloads The cost of traveling (including lodging) from your former home to your new home. Free state tax downloads The cost of moving household goods and personal effects to and from storage. Free state tax downloads The cost of storing household goods and personal effects while you are at the new job location. Free state tax downloads The first two items were explained earlier under Moves to Locations in the United States . Free state tax downloads The last two items are discussed, later. Free state tax downloads Moving goods and effects to and from storage. Free state tax downloads   You can deduct the reasonable expenses of moving your personal effects to and from storage. Free state tax downloads Storage expenses. Free state tax downloads   You can deduct the reasonable expenses of storing your household goods and personal effects for all or part of the time the new job location remains your main job location. Free state tax downloads Moving expenses allocable to excluded foreign income. Free state tax downloads   If you live and work outside the United States, you may be able to exclude from income part or all of the income you earn in the foreign country. Free state tax downloads You may also be able to claim a foreign housing exclusion or deduction. Free state tax downloads If you claim the foreign earned income or foreign housing exclusion, you cannot deduct the part of your moving expenses that relates to the excluded income. Free state tax downloads    Publication 54, Tax Guide for U. Free state tax downloads S. Free state tax downloads Citizens and Resident Aliens Abroad, explains how to figure the part of your moving expenses that relates to excluded income. Free state tax downloads You can get the publication from most U. Free state tax downloads S. Free state tax downloads embassies and consulates, or see How To Get Tax Help at the end of this publication. Free state tax downloads Nondeductible Expenses You cannot deduct the following items as moving expenses. Free state tax downloads Any part of the purchase price of your new home. Free state tax downloads Car tags. Free state tax downloads Driver's license. Free state tax downloads Expenses of buying or selling a home (including closing costs, mortgage fees, and points). Free state tax downloads Expenses of entering into or breaking a lease. Free state tax downloads Home improvements to help sell your home. Free state tax downloads Loss on the sale of your home. Free state tax downloads Losses from disposing of memberships in clubs. Free state tax downloads Mortgage penalties. Free state tax downloads Pre-move househunting expenses. Free state tax downloads Real estate taxes. Free state tax downloads Refitting of carpet and draperies. Free state tax downloads Return trips to your former residence. Free state tax downloads Security deposits (including any given up due to the move). Free state tax downloads Storage charges except those incurred in transit and for foreign moves. Free state tax downloads No double deduction. Free state tax downloads   You cannot take a moving expense deduction and a business expense deduction for the same expenses. Free state tax downloads You must decide if your expenses are deductible as moving expenses or as business expenses. Free state tax downloads For example, expenses you have for travel, meals, and lodging while temporarily working at a place away from your regular place of work may be deductible as business expenses if you are considered away from home on business. Free state tax downloads In most cases, your work at a single location is considered temporary if it is realistically expected to last (and does in fact last) for one year or less. Free state tax downloads   See Publication 463, Travel, Entertainment, Gift, and Car Expenses, for information on deducting your business expenses. Free state tax downloads Reimbursements This section explains how to report a reimbursement (including advances and allowances) on your tax return. Free state tax downloads It covers reimbursements for any of your moving expenses discussed in this publication. Free state tax downloads It also explains the types of reimbursements on which your employer must withhold income, social security, and Medicare taxes. Free state tax downloads Types of Reimbursement Plans If you receive a reimbursement for your moving expenses, how you report this amount and your expenses depends on whether the reimbursement is paid to you under an accountable plan or a nonaccountable plan. Free state tax downloads For a quick overview of how to report your reimbursement and moving expenses, see Table 2 in the section on How and When To Report, later. Free state tax downloads Your employer should tell you what method of reimbursement is used and what records are required. Free state tax downloads Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. Free state tax downloads Your expenses must have a business connection – that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. Free state tax downloads Two examples of this are the reasonable expenses of moving your possessions from your former home to your new home, and traveling from your former home to your new home. Free state tax downloads You must adequately account to your employer for these expenses within a reasonable period of time. Free state tax downloads You must return any excess reimbursement or allowance within a reasonable period of time. Free state tax downloads Adequate accounting. Free state tax downloads   You adequately account for your moving expenses by giving your employer documentation of those expenses, such as a statement of expense, an account book, a diary, or a similar record in which you entered each expense at or near the time you had it. Free state tax downloads Documentation includes receipts, canceled checks, and bills. Free state tax downloads Reasonable period of time. Free state tax downloads   What constitutes a “reasonable period of time” depends on the facts and circumstances of your situation. Free state tax downloads However, regardless of the facts and circumstances, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. Free state tax downloads You receive an advance within 30 days of the time you have an expense. Free state tax downloads You adequately account for your expenses within 60 days after they were paid or incurred. Free state tax downloads You return any excess reimbursement within 120 days after the expense was paid or incurred. Free state tax downloads You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement. Free state tax downloads Excess reimbursement. Free state tax downloads   This includes any amount you are paid (including advances and allowances) that is more than the moving expenses that you adequately accounted for to your employer within a reasonable period of time. Free state tax downloads Returning excess reimbursements. Free state tax downloads   You must be required to return any excess reimbursement for your moving expenses to the person paying the reimbursement. Free state tax downloads Excess reimbursement includes any amount for which you did not adequately account within a reasonable period of time. Free state tax downloads For example, if you received an advance and you did not spend all the money on deductible moving expenses, or you do not have proof of all your expenses, you have an excess reimbursement. Free state tax downloads You meet accountable plan rules. Free state tax downloads   If for all reimbursements you meet the three rules for an accountable plan (listed earlier), your employer should not include any reimbursements of expenses in your income in box 1 of your Form W-2, Wage and Tax Statement. Free state tax downloads Instead, your employer should include the reimbursements in box 12 of your Form W-2. Free state tax downloads Example. Free state tax downloads You lived in Boston and accepted a job in Atlanta. Free state tax downloads Under an accountable plan, your employer reimbursed you for your actual traveling expenses from Boston to Atlanta and the cost of moving your furniture to Atlanta. Free state tax downloads Your employer will include the reimbursement on your Form W-2, box 12, with Code P. Free state tax downloads If your moving expenses are more than your reimbursement, you may be able to deduct your additional expenses (see How and When To Report, later). Free state tax downloads You do not meet accountable plan rules. Free state tax downloads   You may be reimbursed by your employer, but you may not meet all three rules for part of your expenses. Free state tax downloads   If your deductible expenses are reimbursed under an otherwise accountable plan but you do not return, within a reasonable period, any reimbursement of expenses for which you did not adequately account, then only the amount for which you did adequately account is considered as paid under an accountable plan. Free state tax downloads The remaining expenses are treated as having been reimbursed under a nonaccountable plan (discussed below). Free state tax downloads Reimbursement of nondeductible expenses. Free state tax downloads   You may be reimbursed by your employer for moving expenses, some of which are deductible expenses and some of which are not deductible. Free state tax downloads The reimbursements you receive for the nondeductible expenses and any allowances for miscellaneous or unspecified expenses are treated as paid under a nonaccountable plan (see below) and are included in your income. Free state tax downloads If you are reimbursed by your employer for the taxes you must pay (including social security and Medicare taxes) because you have received taxable moving expense reimbursements, you must pay tax on this reimbursement as well, and it is treated as paid under a nonaccountable plan. Free state tax downloads Nonaccountable Plans A nonaccountable plan is a reimbursement arrangement that does not meet the three rules listed earlier under Accountable Plans. Free state tax downloads In addition, the following payments will be treated as paid under a nonaccountable plan. Free state tax downloads Excess reimbursements you fail to return to your employer. Free state tax downloads Reimbursements of nondeductible expenses. Free state tax downloads See Reimbursement of nondeductible expenses, earlier. Free state tax downloads If an arrangement pays for your moving expenses by reducing your wages, salary, or other pay, the amount of the reduction will be treated as a payment made under a nonaccountable plan. Free state tax downloads This is because you are entitled to receive the full amount of your pay regardless of whether you had any moving expenses. Free state tax downloads If you are not sure if the moving expense reimbursement arrangement is an accountable or nonaccountable plan, ask your employer. Free state tax downloads Your employer will add the amount of any reimbursement paid to you under a nonaccountable plan to your wages, salary, or other pay. Free state tax downloads Your employer will report the total in box 1 of your Form W-2. Free state tax downloads Example. Free state tax downloads To get you to work in another city, your new employer reimburses you under an accountable plan for the $7,500 loss on the sale of your home. Free state tax downloads Because this is a reimbursement of a nondeductible expense, it is treated as paid under a nonaccountable plan and must be included as income in box 1 of your Form W-2. Free state tax downloads Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 Do not include in income any moving expense payment you received under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. Free state tax downloads These payments are made to persons displaced from their homes, businesses, or farms by federal projects. Free state tax downloads Tax Withholding and Estimated Tax Your employer must withhold income, social security, and Medicare taxes from reimbursements and allowances paid to you that are included in your income. Free state tax downloads See Reimbursements included in income, later. Free state tax downloads Reimbursements excluded from income. Free state tax downloads   Your employer should not include in your wages reimbursements paid under an accountable plan (explained earlier) for moving expenses that you: Could deduct if you had paid or incurred them, and Did not deduct in an earlier year. Free state tax downloads These reimbursements are fringe benefits excludable from your income as qualified moving expense reimbursements. Free state tax downloads Your employer should report these reimbursements on your Form W-2, box 12, with Code P. Free state tax downloads    You cannot claim a moving expense deduction for expenses covered by reimbursements excluded from income (see Accountable Plans under Types of Reimbursement Plans, earlier). Free state tax downloads Expenses deducted in earlier year. Free state tax downloads   If you receive a reimbursement this year for moving expenses deducted in an earlier year, and the reimbursement is not included as wages in box 1 of your Form W-2, you must include the reimbursement in income on Form 1040, line 21. Free state tax downloads Your employer should show the amount of your reimbursement in box 12 of your Form W-2. Free state tax downloads Reimbursements included in income. Free state tax downloads   Your employer must include in your income any reimbursements made (or treated as made) under a nonaccountable plan, even though they are for deductible moving expenses. Free state tax downloads See Nonaccountable Plans under Types of Reimbursement Plans, earlier. Free state tax downloads Your employer also must include in your gross income as wages any reimbursements of, or payments for, nondeductible moving expenses. Free state tax downloads This includes amounts your employer reimbursed you under an accountable plan (explained earlier) for meals, househunting trips, and real estate expenses. Free state tax downloads It also includes reimbursements that exceed your deductible expenses and that you do not return to your employer. Free state tax downloads Reimbursement for deductible and nondeductible expenses. Free state tax downloads    If your employer reimburses you for both deductible and nondeductible moving expenses, your employer must determine the amount of the reimbursement that is not taxable and not subject to withholding. Free state tax downloads Your employer must treat any remaining amount as taxable wages and withhold income, social security, and Medicare taxes. Free state tax downloads Amount of income tax withheld. Free state tax downloads   If the reimbursements or allowances you receive are taxable, the amount of income tax your employer will withhold depends on several factors. Free state tax downloads It depends in part on whether income tax is withheld from your regular wages, on whether the reimbursements and allowances are added to your regular wages, and on any information you have given to your employer on Form W-4, Employee's Withholding Allowance Certificate. Free state tax downloads   Your employer can treat your reimbursements as supplemental wages and not include the reimbursements and allowances in your regular wages. Free state tax downloads The employer can withhold income tax on supplemental wages at a flat rate which may be different from your regular tax rate. Free state tax downloads Estimated tax. Free state tax downloads    If you must make estimated tax payments, you need to take into account any taxable reimbursements and deductible moving expenses in figuring your estimated tax. Free state tax downloads For details about estimated taxes, see Publication 505, Tax Withholding and Estimated Tax. Free state tax downloads How and When To Report This section explains how and when to report your moving expenses and any reimbursements or allowances you received for your move. Free state tax downloads For a quick overview, see Table 2, later. Free state tax downloads Form 3903 Use Form 3903 to figure your moving expense deduction. Free state tax downloads Use a separate Form 3903 for each move for which you are deducting expenses. Free state tax downloads Do not file Form 3903 if all of the following apply. Free state tax downloads You moved to a location outside the United States in an earlier year. Free state tax downloads You are claiming only storage fees while you were away from the United States. Free state tax downloads Any amount your employer paid for the storage fees is included as wages in box 1 of your Form W-2. Free state tax downloads Instead, enter the storage fees (after the reduction for the part that is allocable to excluded income) on Form 1040, line 26, and enter “Storage” on the dotted line next to the amount. Free state tax downloads If you meet the special rules for members of the Armed Forces, see How to complete Form 3903 for members of the Armed Forces under Members of the Armed Forces, later. Free state tax downloads Completing Form 3903. Free state tax downloads   Complete Worksheet 1, earlier, or the Distance Test Worksheet in the instructions for Form 3903 to see whether you meet the distance test. Free state tax downloads If so, complete lines 1 through 3 of the form using your actual expenses (except, if you use your own car, you can figure expenses based on the standard mileage rate, instead of actual amounts for gas and oil). Free state tax downloads Enter on line 4 the total amount of your moving expense reimbursement that was excluded from your wages. Free state tax downloads This excluded amount should be identified on Form W-2, box 12, with code P. Free state tax downloads Expenses greater than reimbursement. Free state tax downloads   If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Form 1040, line 26. Free state tax downloads This is your moving expense deduction. Free state tax downloads Expenses equal to or less than reimbursement. Free state tax downloads    If line 3 is equal to or less than line 4, you have no moving expense deduction. Free state tax downloads Subtract line 3 from line 4 and, if the result is more than zero, include it as income on Form 1040, line 7. Free state tax downloads Table 2. Free state tax downloads Reporting Your Moving Expenses and Reimbursements IF your Form W-2 shows. Free state tax downloads . Free state tax downloads . Free state tax downloads AND you have. Free state tax downloads . Free state tax downloads . Free state tax downloads THEN. Free state tax downloads . Free state tax downloads . Free state tax downloads your reimbursement reported only  in box 12 with code P moving expenses greater than the  amount in box 12 file Form 3903 showing all allowable  expenses* and reimbursements. Free state tax downloads your reimbursement reported only  in box 12 with code P moving expenses equal to the amount  in box 12 do not file Form 3903. Free state tax downloads your reimbursement divided  between box 12 and box 1 moving expenses greater than the  amount in box 12 file Form 3903 showing all allowable  expenses,* but only the  reimbursements reported in box 12 of  Form W-2. Free state tax downloads your entire reimbursement reported  as wages in box 1 moving expenses file Form 3903 showing all allowable  expenses,* but do not show any  reimbursements. Free state tax downloads no reimbursement moving expenses file Form 3903 showing all allowable  expenses. Free state tax downloads * * See Deductible Moving Expenses, earlier, for allowable expenses. Free state tax downloads    Where to deduct. Free state tax downloads   Deduct your moving expenses on Form 1040, line 26. Free state tax downloads The amount of moving expenses you can deduct is shown on Form 3903, line 5. Free state tax downloads    You cannot deduct moving expenses on Form 1040EZ or Form 1040A. Free state tax downloads   When To Deduct Expenses You may have a choice of when to deduct your moving expenses. Free state tax downloads Expenses not reimbursed. Free state tax downloads   If you were not reimbursed, deduct your moving expenses in the year you paid or incurred the expenses. Free state tax downloads Example. Free state tax downloads In December 2012, your employer transferred you to another city in the United States, where you still work. Free state tax downloads You are single and were not reimbursed for your moving expenses. Free state tax downloads In 2012, you paid for moving your furniture and deducted these expenses on your 2012 tax return. Free state tax downloads In January 2013, you paid for travel to the new city. Free state tax downloads You can deduct these additional expenses on your 2013 tax return. Free state tax downloads Expenses reimbursed. Free state tax downloads   If you are reimbursed for your expenses and you use the cash method of accounting, you can deduct your expenses either in the year you paid them or in the year you received the reimbursement. Free state tax downloads If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year. Free state tax downloads See Choosing when to deduct, next. Free state tax downloads   If you deduct your expenses and you receive the reimbursement in a later year, you must include the reimbursement in your income on Form 1040, line 21. Free state tax downloads Choosing when to deduct. Free state tax downloads   If you use the cash method of accounting, which is used by most individuals, you can choose to deduct moving expenses in the year your employer reimburses you if: You paid the expenses in a year before the year of reimbursement, or You paid the expenses in the year immediately after the year of reimbursement but by the due date, including extensions, for filing your return for the reimbursement year. Free state tax downloads How to make the choice. Free state tax downloads   You choose to deduct moving expenses in the year you received reimbursement by taking the deduction on your return, or amended return, for that year. Free state tax downloads    You cannot deduct any moving expenses for which you received a reimbursement that was not included in your income. Free state tax downloads Illustrated Example Tom and Peggy Smith are married and have two children. Free state tax downloads They owned a home in Detroit where Tom worked. Free state tax downloads On February 8, 2013, Tom's employer told him that he would be transferred to San Diego as of April 10 that year. Free state tax downloads Peggy flew to San Diego on March 1 to look for a new home. Free state tax downloads She put a down payment of $25,000 on a house being built and returned to Detroit on March 4. Free state tax downloads The Smiths sold their Detroit home for $1,500 less than they paid for it. Free state tax downloads They contracted to have their personal effects moved to San Diego on April 3. Free state tax downloads The family drove to San Diego where they found that their new home was not finished. Free state tax downloads They stayed in a nearby motel until the house was ready on May 1. Free state tax downloads On April 10, Tom went to work in the San Diego plant where he still works. Free state tax downloads Their records for the move show: 1) Peggy's pre-move househunting  trip:       Travel and lodging   $ 449       Meals   75   $ 524 2) Down payment on San Diego  home 25,000 3) Real estate commission paid on  sale of Detroit home 3,500 4) Loss on sale of Detroit home (not  including real estate commission) 1,500 5) Amount paid for moving personal  effects (furniture, other household  goods, etc. Free state tax downloads ) 8,000 6) Expenses of driving to San Diego:       Mileage (Start 14,278;  End 16,478) 2,200 miles at 24 cents a mile   $ 528       Lodging   180       Meals   320   1,028 7) Cost of temporary living  expenses in San Diego:       Motel rooms   $1,450       Meals   2,280   3,730 Total $43,282   Tom was reimbursed $10,907 under an accountable plan. Free state tax downloads His employer gave him the following breakdown of the reimbursement that was allowed under the employer's plan. Free state tax downloads Moving personal effects   $6,800 Travel (and lodging) to San Diego   708 Travel (and lodging) for househunting trip   449 Lodging for temporary quarters   1,450 Loss on sale of home   1,500 Total reimbursement   $10,907 The employer included this reimbursement on Tom's Form W-2 for the year. Free state tax downloads The reimbursement of allowable expenses, $7,508 for moving household goods and travel to San Diego, was included in box 12 of Form W-2. Free state tax downloads His employer identified this amount with code P. Free state tax downloads The employer included the balance, $3,399 reimbursement of nonallowable expenses, in box 1 of Form W-2 with Tom's other wages. Free state tax downloads Tom must include this amount on Form 1040, line 7. Free state tax downloads The employer withholds taxes from the $3,399, as discussed under Reimbursement for deductible and nondeductible expenses under Tax Withholding and Estimated Tax, earlier. Free state tax downloads Also, Tom's employer could have given him a separate Form W-2 for his moving expense reimbursement. Free state tax downloads To figure his tax deduction for moving expenses, Tom enters the following amounts on Form 3903. Free state tax downloads Item 5 — moving personal effects (line 1)   $8,000 Item 6 — driving to San Diego ($528 + $180)  (line 2)   708 Total tax deductible moving expenses (line 3)   $8,708 Minus: Reimbursement included in box 12  of Form W-2 (line 4)   7,508 Tax deduction for moving expenses (line 5)   $1,200   Tom's Form 3903 is shown, later. Free state tax downloads He also enters his deduction, $1,200, on Form 1040, line 26. Free state tax downloads Nondeductible expenses. Free state tax downloads   Of the $43,282 expenses that Tom and Peggy incurred, the following items totaling $34,574 ($43,282 – $8,708) cannot be deducted. Free state tax downloads Item 1 — pre-move househunting expenses of $524. Free state tax downloads Item 2 — the $25,000 down payment on the San Diego home. Free state tax downloads If any part of it were for payment of deductible taxes or interest on the mortgage on the house, that part would be deductible as an itemized deduction. Free state tax downloads Item 3 — the $3,500 real estate commission paid on the sale of the Detroit home. Free state tax downloads The commission is used to figure the gain or loss on the sale. Free state tax downloads Item 4 — the $1,500 loss on the sale of the Detroit home. Free state tax downloads Item 6 — the $320 expense for meals while driving to San Diego. Free state tax downloads (However, the lodging and car expenses are deductible. Free state tax downloads ) Item 7 — temporary living expenses of $3,730. Free state tax downloads    This image is too large to be displayed in the current screen. Free state tax downloads Please click the link to view the image. Free state tax downloads 2012 Form 3903 Moving Expenses Members of the Armed Forces If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you do not have to meet the distance and time tests, discussed earlier. Free state tax downloads You can deduct your unreimbursed moving expenses. Free state tax downloads A permanent change of station includes: A move from your home to your first post of active duty, A move from one permanent post of duty to another, and A move from your last post of duty to your home or to a nearer point in the United States. Free state tax downloads The move must occur within one year of ending your active duty or within the period allowed under the Joint Travel Regulations. Free state tax downloads Spouse and dependents. Free state tax downloads   If a member of the Armed Forces dies, is imprisoned, or deserts, a permanent change of station for the spouse or dependent includes a move to: The place of enlistment, The member's, spouse's, or dependent's home of record, or A nearer point in the United States. Free state tax downloads   If the military moves you, your spouse, and dependents, to or from separate locations, the moves are treated as a single move to your new main job location. Free state tax downloads Services or reimbursements provided by government. Free state tax downloads   Do not include in income the value of moving and storage services provided by the government because of a permanent change of station. Free state tax downloads In general, if the total reimbursements or allowances you receive from the government because of the move are more than your actual moving expenses, the government must include the excess in your wages on Form W-2. Free state tax downloads However, the excess portion of a dislocation allowance, a temporary lodging allowance, a temporary lodging expense, or a move-in housing allowance is not included in income and should not be included in box 1 of Form W-2. Free state tax downloads   If your reimbursements or allowances are less than your actual moving expenses, do not include the reimbursements or allowances in income. Free state tax downloads You can deduct the expenses that are more than your reimbursements. Free state tax downloads See Deductible Moving Expenses, earlier. Free state tax downloads How to complete Form 3903 for members of the Armed Forces. Free state tax downloads    Take the following steps. Free state tax downloads Complete lines 1 through 3 of the form, using your actual expenses. Free state tax downloads Do not include any expenses for moving services provided by the government. Free state tax downloads Also, do not include any expenses that were reimbursed by an allowance you do not have to include in your income. Free state tax downloads Enter on line 4 the total reimbursements and allowances you received from the government for the expenses claimed on lines 1 and 2. Free state tax downloads Do not include the value of moving or storage services provided by the government. Free state tax downloads Also, do not include any part of a dislocation allowance, a temporary lodging allowance, a temporary lodging expense, or a move-in housing allowance. Free state tax downloads Complete line 5. Free state tax downloads If line 3 is more than line 4, subtract line 4 from line 3 and enter the result on line 5 and on Form 1040, line 26. Free state tax downloads This is your moving expense deduction. Free state tax downloads If line 3 is equal to or less than line 4, you do not have a moving expense deduction. Free state tax downloads Subtract line 3 from line 4 and, if the result is more than zero, enter it on Form 1040, line 7. Free state tax downloads If the military moves you, your spouse and dependents, to or from different locations, treat these moves as a single move. Free state tax downloads    Do not deduct any expenses for moving or storage services provided by the government. Free state tax downloads How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. Free state tax downloads Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. Free state tax downloads Free help with your tax return. Free state tax downloads   Free help in preparing your return is available nationwide from IRS-certified volunteers. 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Free state tax downloads Before visiting, check www. Free state tax downloads irs. Free state tax downloads gov/localcontacts for hours of operation and services provided. Free state tax downloads Mail. Free state tax downloads You can send your order for forms, instructions, and publications to the address below. Free state tax downloads You should receive a response within 10 business days after your request is received. Free state tax downloads  Internal Revenue Service 1201 N. Free state tax downloads Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. Free state tax downloads   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Free state tax downloads Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Free state tax downloads What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. 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Free state tax downloads Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Free state tax downloads Visit www. Free state tax downloads TaxpayerAdvocate. Free state tax downloads irs. Free state tax downloads gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. Free state tax downloads Prev  Up  Next   Home   More Online Publications